September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
21 November 2022, Hilton London Metropole
The good times for Europe's hotels seems either to have returned or at least to be their way. The latest findings from Paris-based MKG Consulting (see BTE news story: Europe's hotels enjoy â€˜good results' â€“ MKG) show that in the first quarter of 2005, Denmark and Sweden both enjoyed a substantial rise in revenue per available room (Rev PAR) of, respectively, 20.2% and 16.4%.Slightly down the line were Austria and the UK which had increases, respectively, of 8.2% and 5.9%. Even the London bombs and bomb attempts in July had no more, it seems, than a passing effect on business. Paris seems to be on the verge of enjoying a boom while high demand from business travellers in the Benelux countries has also pushed up rev PAR there.The obvious reason, as MKG found, is that more people are staying at European hotels, especially from America and Asia. Not surprisingly, hotel chains are also reporting increased profits. The InterContinental Hotels Group (IHG) reported a 33% increase in operating profits for its hotels division while last week, Accor, the giant French hotel group, also reported a 22.8% rise in its pre-tax operating profit for the first half of 2005. The Hilton Group also reported a small profit rise last month.But industry experts believe there might well be other reasons why hotels are doing so much better. A major factor is that since the dreadful days post-9/11 when business was not only bad but many chains lost control of their own rates, hotels have gone a long way to sorting themselves out.Six of the major chains Marriott, Hilton, IHG, Accor Choice and Le Meridien (now controlled by Starwood) are now much more committed, since the start of 2005, to new ways of offering rates. The basis of this new offering is a simplification of the rates available. In the past, these were often so complicated as to fox the hoteliers themselves.Now it is a far more straightforward offer which boils down to the best rate at the time of booking and far more in line with the simplified method of how airlines sell their seats. It also applies no matter which channel the bookers uses to make the reservation. It is a point that the Hilton Group, for one, now highlights in its presentations to agencies.From the hotels' point of view, this yield management system works well as it helps them control the rate up to the point of sale. In the past, rates often changed a dozen or more times a day and floundering hotels were sometimes left to accept what ever rate they could get.Another affect seems to be that corporates are now more ready to sign deals based on guaranteed volume with hotel chains, knowing they can compare it with the best rate available.In the dark days, many began questioning the value of these deals, including hoteliers, travel managers and agencies.Fixed rate deals did leave both sides with room for complaint. If the agreed rate was higher than the hotel's best rate at the time of booking, the corporate was angry. If the agreed rate was lower, the hotel felt it has missed out on a better rate. One hotelier said it meant that for 50% of the time, the corporate was unhappy and for 50% of the time, the hotel was. This is not a good basis for any deal. Simplified rates and yield management make business for the hotel more stable while the corporate still has the choice. And to guarantee it gets the best rate, a corporate should have a list of preferred hotels so it can shop around, experts say.But corporates can still use the online agencies or hotel booking agencies which say they can get substantial reductions in price due to their own buying power. Naturally, the big travel management companies dispute this but the important thing may be that it gives the corporate a choice.